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The second main proposal in the report concerns the idea of GPs issuing patients with a fit note instead of signing them off work with a sick note. That mainly focuses on what patients cannot do. Dame Carol proposes reversing this with a system in which the doctor discusses with the patient what work they might be able to do and suggests how a return to work might be achieved.

The Government’s formal response to Dame Carol’s report is not expected until the autumn. However, on 17 March, the right honourable James Purnell, MP, Secretary of State for Work and Pensions, made a Statement to the House of Commons welcoming the review and announcing a number of measures designed to respond to its recommendations: an £11 million capital fund to set up six new NHS Plus demonstration sites to look at innovative ways of supporting small and medium-sized businesses with occupational health services, adding to the five demonstration sites established in 2007; an exploration of Dame Carol’s suggestion for a fit-for-work service for people in the early stages of sickness absence; the development of a national strategy on mental health; and improved access to psychological therapy programmes.

Dame Carol makes it clear in her report that much more needs to be done to support those who experience a health condition while in work to retain their employment. The Minister will be aware that the Employment Retention Bill was introduced by the honourable Member for Glasgow North West, John Robertson, in the other place to highlight the need for stronger rights in this area. Each year, around 25,000 people permanently leave work because of ill health and disability. With timely assessment and support, many could have remained in work. RNIB—of which I am chairman, and so declare an interest—has been working with employers to establish the financial benefits of supporting newly disabled employees to remain in work. Lloyds TSB conducted such an exercise and was able to estimate that the net gain from retaining a clerical member of staff is around £2,500; for a senior clerical staff member, this is around £4,500; and for a manager, around £9,000.

However, what is required of an employer in terms of providing assessments and support to newly disabled staff is unclear following a recent Employment Appeal Tribunal decision. In the case of Spence v Intype Libra Ltd, it was ruled that the Disability Discrimination Act does not require employers to undertake an assessment of the needs of staff at risk of losing their job because of a disability or health condition. The Employment Retention Bill seeks to create a right to an assessment for staff at risk of losing their job, and appropriate rehabilitation and training support to enable them to make a return to work. Will the Government support

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a measure such as the Employment Retention Bill, or include such a provision in their own legislation with a view to clarifying the law in this area?

The welfare reform Green Paper, published today, states that the Government will,

I take this to mean the commitment to develop a cross-governmental national strategy on employment retention, as set out in the independent living strategy. Can the Minister confirm this, and give a timetable for the development of this strategy, and state how the Government will go about investigating whether initiatives, such as a right to request an employment retention assessment, would be an appropriate way forward?

In April, Health Minister Ivan Lewis announced 11 demonstration projects to,

Project funding was to be managed by NHS Plus, a network of NHS occupational health departments across England that aims to increase the availability of occupational health services for small and medium-sized employers. I am pleased to learn from today's Green Paper that the Government are to pilot the fit-for-work service in city strategy areas. This potentially goes considerably wider. However, I would be keen to learn from the Minister how many pilots there will be for testing out different delivery mechanisms, how long they will last and what specific health conditions or disabilities they will cover. This is an important issue because the pilots announced so far do not test the full fit-for-work case-managed service proposed by Dame Carol. All the pilot funding has gone to NHS trusts, so it is not yet clear if or how the different models of partnership delivery proposed in the Black report will be tested. It would be a lost opportunity if the pilots were to focus only on the largest numbers of people at risk of losing their jobs—those who have developed mental health and musculoskeletal problems. While the number of people on benefits with such problems is substantial, it is vital that the pilots also shed light on how to support other groups, such as people experiencing sight loss, as each year 25 per cent of those who begin to lose their sight while in work will leave their employment. If they could be helped to stay in work it would make a considerably greater impact on the employment of visually impaired people than getting them into work for the first time.

Will the Minister also elaborate on the Government’s welcome acceptance of Dame Carol’s suggestion of the fit note, or at any rate the idea that the sick note system needs to be reviewed? The desire for GPs to focus on what work their patients can do rather than what they cannot clearly fits in with a change in focus manifested in the move for new claimants from incapacity benefit to employment and support allowance. However, GPs do not have specialist occupational health training, so there is a question to be asked about whether they are the best people to be making recommendations on work-related issues.

The Minister will know that the access-to-work scheme can provide support for critical job retention assessments when an employee is at risk of losing his job because of disability, leading to implementation of

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a package of support to enable the employee to retain his employment. In 2007-08 access to work provided grants totalling £62 million to help around 40,000 people to keep or get work. I should say at once how much I welcome today’s announcement of a doubling in the budget for access to work, but can the Minister say how this important scheme will fit in with the fit for work service? There is evidence that it is not as widely known as it should be. It should be promoted and fully integrated as part of the back-to-work services.

In conclusion, the Black report makes an important contribution to the debate on how we stop people who experience ill health and disability while in work losing their jobs and moving on to benefits. Dame Carol suggests a number of innovative policy and service delivery changes that are most welcome. I realise that a formal response is not expected until after the Recess, but I hope that the Minister may give us a further indication of the Government’s thinking and respond to some of my more detailed questions.

7.43 pm

Baroness Thomas of Winchester: My Lords, I congratulate the noble Lord, Lord Low of Dalston, on giving us the opportunity on this of all days to discuss this important report. As he said, today’s debate is particularly timely in view of the Government’s Statement on welfare reform today which, among other things, puts more flesh on some familiar bones from last year’s Welfare Reform Act. It gives us the opportunity to look at the health of not only those out of work but those in employment. Dame Carol has posed some major challenges for the Government as well as for employers, some of which the Government have already welcomed.

Before turning to the proposals in the review, I must express my concerns about the new regime which was the focus of last year’s Welfare Reform Act, and which will start this autumn in earnest when employment and support allowance replaces incapacity benefit for new benefit claimants. By then, the economic downturn will have started seriously to affect the number of unemployed, and it could be the worst possible time for vulnerable people, even with support, to be encouraged to try to find some work rather than claiming benefits. Already the percentage of those claiming unemployment benefit has risen to 2.6 of the working age population, the biggest rise in 16 years. Will employers, when faced with a larger than ever cohort of healthy people who are in the jobs market, be willing to offer employment to those whose health may make their attendance or reliability more unpredictable?

At one point Dame Carol says confidently that jobs are “plentiful” with more than 500,000 unfilled vacancies. I wonder how long that will be true. I hate to sound gloomy, but one has to face up-to-date facts. The review highlights the fact that Britain is not, as some of the tabloids would have us believe, a work-shy nation. By last year, 74 per cent of working age people were recorded as employed—close to a record high. The Government would like to see that figure rise even higher—to 80 per cent—and we on these Benches agree with them, but only if the way this is brought

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about is sensible, well-managed and well-resourced. Higher employment is good not only for the economy but has also been shown to be good for the general health of the population, and particularly for alleviating child poverty. Even the employment rate for disabled people has shown a welcome rise in the past 10 years from 38 per cent to 48 per cent, but there is a very long way to go to improve that figure.

The review sets out three objectives in the quest for a better vision of work and health in Britain. They are: the prevention of illness and promotion of health and well-being; early intervention in cases of ill health, and an improvement in the health of those unemployed to help them find work. No one can possibly object to those laudable aims, but the key question is how exactly to achieve them when the word “health” spans all kinds of situations from common infections, through all the problems associated with obesity, addictions, the range of mental health disorders, both long and short term, and all the musculoskeletal conditions right through to serious, life-threatening illnesses. There has to be a raft of initiatives for each of the three objectives because one size cannot possibly fit so many different states of health—a nettle that Dame Carol has grasped with a comprehensive and ambitious list of proposals.

She starts by spelling out clearly that good working practices lead to improved financial performance. Although there are many large companies that take the health of their workforce seriously and have strategies in place for helping those who are absent through ill health, many smaller employers do not have any human resource function of any sort, as the noble Lord, Lord Low, said, relying on informal contacts with absent staff or not keeping in contact at all.

Dame Carol does not exclude those smaller companies from her recommendations, the key one being that every company should have some sort of ill health absence management policy, with the Government piloting a new fit for work service. This ambitious proposal is at the heart of her recommendations and is based, as we have heard, on an early intervention, holistic approach to workplace ill health absence, which aims to look at the whole picture of a person’s life—that is, the biological, psychological and social impact. The rationale of such a service is indisputable. Dame Carol concludes:

I believe that the Government have accepted the recommendation to pilot this proposal. The noble Lord, Lord Low, asked some important questions about the pilots and I, too, would like some details. Can the Minister tell us where the pilots will be, who will be able to access them, whether they will cover just some conditions, when they will start, and how much—crucially—they are expected to cost?

Turning now to the other side of the coin—the health of those out of work—Dame Carol cites the huge number of people, 600,000, who move on to incapacity benefits each year, around 28 per cent from jobseeker’s allowance and 55 per cent from work or a period of ill health absence from work. That last

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figure leads her to the conclusion, which must be right, that more needs to be done to address the health conditions of those sliding on to benefits from work. She emphatically makes the point that the ESA mantra that the focus will be on what people can do rather than what they cannot do is not enough, and she recommends expanding the fit for work service with its holistic approach to cover workless people. This, she suggests, should cover such services as cognitive behavioural therapy, physiotherapy, advice and counselling for wider social problems, such as debt management.

I find that recommendation much more helpful and hopeful for unemployed people than the more punitive-sounding regimes in the previous Welfare Reform Act. As I have said before in this Chamber, Citizens Advice, which is, after all, at the coalface, says that at present employers are very reluctant to employ people with health problems. It sees many people who are dismissed from work while they are off sick, simply on account of their illness.

This brings me to the whole question of those with mental ill-health problems. The cost to business of mental ill-health at work is reckoned to be £25.9 billion, with more than half of that cost being lost productivity among people who turn up for work but do not work effectively, which is now called “presenteeism”. Dame Carol commissioned her own report from the Royal College of Psychiatrists entitled Mental Health and Work, which gave the astonishing figure that 5 million people of working age have a common mental health disorder and just under 1 million have a severe condition. Mental health conditions are now the single biggest cause of absence from work and claims for incapacity benefits. Less than a quarter of people with mental health conditions are in employment, compared with just under half of all disabled people of working age.

Measures to tackle the problem must therefore be given the highest priority. In last year's Welfare Reform Act there was the welcome news that more money is going to be put into training in cognitive behavioural therapies and that there will be quicker access for patients, and from today's Statement we learn that the Government are to set out a national strategy for mental health and employment. That is good news indeed, but how many extra people are training as cognitive behavioural therapists and how long is the average waiting time for a referral from a GP? That is one part of the problem.

The other part of the problem is the attitude of employers. In the royal college's report to Dame Carol, one patient is quoted as saying that he really wanted to apply for a job as a community warden. He said:

If people with mental health problems finally get a job, they frequently report being denied opportunities for training, promotion or transfer, saying that work colleagues tend to view mental illness as a personal failure. It is interesting that a recent survey of employers by the Chartered Institute of Personnel and Development found that 61 per cent reported a positive experience

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of employing people with a history of mental health problems, while only 15 per cent reported a negative experience.

So what are the keys to reducing mental ill-health absence at work? One of Dame Carol's main findings was that work is good for health, but that means that employers, particularly line managers, must be aware of how to treat their workers well; for example, watching out for, and dealing with, bullying; making sure employees do not have unrealistic expectations; and allowing workers to have some control over how they work. It also means allowing the possibility of flexible working for those who are suffering mental distress, ensuring that they have speedy access to psychological therapies and giving them effective rehabilitation after time off work.

I have one minute remaining. Noble Lords will be pleased to hear that this House has a good record as an employer and keeps closely in touch with those who are absent through ill health with a view to helping them to return as appropriate. The Government are one of the biggest employers in the country, so I hope their employment record is as good as that of this House.

Dame Carol has produced a clear blueprint for the way ahead. We welcome it and look forward to the Government's response.

7.53 pm

Lord Taylor of Holbeach: My Lords, I thank the noble Lord, Lord Low of Dalston, for enabling this important debate. It is certainly necessary and, as the noble Baroness, Lady Thomas, said, it is timely to ask Her Majesty’s Government how they will respond to the recommendations of Dame Carol Black’s incisive review of the health of the working age population.

The report has correctly been highly praised. It looks at these problems through the right end of the telescope. The subjects it raises are an integral part of this country's future and deserve through discussion. It seems that today is the day for such discussion. It was but three hours ago that I stood here across from the Minister while he delivered a Statement on the subject of welfare reform. Noble Lords will be experiencing a sense of déj vu because Dame Carol Black’s report is a precursor of the Government’s proposals, which were announced to Parliament today, as was the report by David Freud. I do not want to be guilty of repetition for there are other facets of this problem that require our attention. Indeed, if anyone is to be found guilty of repeating what has been said before, it is the Government—I am sure the Minister will forgive my tease—who have that honour because the Statement this afternoon was nearly a straight repetition of the Conservative welfare policy as set out in January.

Notwithstanding today’s Statement, I hope that the Government are still prepared to respond, eventually, to Dame Carol Black’s review. It was published in March and, other than in the Statement today, the Government have yet to give any indication of whether they intend to listen to its findings. Thus, my first question for the Minister is simply: when can we expect a response?

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The central intention of Dame Carol Black's report was to examine not only the costs of ill-health and its impact on work, but also the human costs that are often hidden and privately borne. The report noted that:

The economic impact is enormous. The report cited the fact that:

That is indeed grave. Yet what is being done about the other impacts of worklessness? What have the Government done to address the very serious problem of social exclusion?

The report suggests a number of measures designed to tackle some of these problems. One of its recommendations is the establishment of robust models for measuring and reporting on the benefits of employer investment in health and well-being. Is that something that the Government will consider? The report advocates business-led health and well-being consultancy services to improve occupational health support. What is the Government’s view on that? This is a pressing problem that will grow in future. Thus, it is important that we hear what the Government will take away from this report and what they plan to continue to ignore.

The report raises a problem of alarming magnitude, that of benefit dependence. We have been focusing on this issue this afternoon. The Minister at times sounded complacent that the problem is reducing. It is not. My figures tell me that there are currently 2.6 million people claiming incapacity benefit. Of those, 1.8 million—nearly 70 per cent—began their claim after 1997. This Government have made more and more people dependent on benefits. This tide must be not only stemmed but reversed. Why has it taken the Government so long to acknowledge that there is a serious and deeply entrenched problem? On this Government’s watch, 1.8 million people started claiming and have failed to get off the benefit because of a constant cycle of ill-conceived and ill-managed reforms. Do the Government now have the courage to agree that over the past 10 years, they have failed to help these people get back to work?

I do not want to present your Lordships’ House with instances of gloom and doom only. There are ways out of the current crisis; indeed, the Statement discussed some of them. We welcomed it because it showed that the Government are finally willing to follow the Conservative lead. We support the proposals for compulsory community work programmes and for independent medical assessments for incapacity benefit claimants. We support these proposals now, just as we supported them when we announced them six months ago. In January, Ministers called our ideas unworkable and uncosted. They are now government policy. Yet in politics, it is important to pursue the best ideas, regardless of origin, and for that I applaud the Government’s courage in such a drastic U-turn.

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There is a risk, still. If the problems outlined by Dame Carol Black are to be tackled, there must be support for solutions. Incapacity benefit dependence is a blight where it is not appropriate. If measures to get able people back to work are not implemented with care, consideration and full support, we will continue the cycle of failure. It seems to be another of the Government’s great skills not only to steal Conservative ideas—for which I forgive them—but then to implement them poorly, under-resourced and then watch them discredited. There is too much at risk in this area to allow that to happen.

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